My views on the skills gap

I became involved in workforce development out of necessity, with a little help from both near (my 80-year-old father) and far (across the Atlantic Ocean).

One night in 2007, shortly after I had joined Simmons as President and COO, I was working late and called my dad looking for a bit of sympathy. Woe is me, skilled employees are retiring right and left, I can’t find any machine tool assemblers, computer numeric controlled (CNC) machinists, on and on. You can picture my Dad if you think of Wilford Brimley—kind of gruff, but a heart of gold. He was a successful manufacturing entrepreneur in Detroit selling CNC machine systems to BMW, Toyota, Fiat, Ford, all the big auto companies. Allowing you to sit back and complain was not his style. He listened for a bit, then simply said, “So, what did you do today about fixing the problem?” Later that night I tried the same sympathy ploy with my wife and got much the same reaction—but she added that I should already know the solution, using lessons learned from her home country, Germany.

Across the USA there is a skills shortage spanning a wide range of industries for such jobs as lab technicians, machinists, industrial maintenance technicians, automotive technicians, plumbers, and electricians. We have reached a point where key manufacturing technologies cannot be deployed, due to a lack of people to program, operate, and maintain computerized industrial equipment. Most of these jobs do not require a four-year degree at an expensive university. A two-year associate degree will do just fine, and it makes an excellent stepping stone to further education at the bachelor’s level if the student so desires.

When I first joined Simmons, the management team performed a SWOT analysis (examining our Strengths, Weaknesses, Opportunities and Threats), and the top weakness we identified was a workforce shortage, accompanied by a high rate of expected retirements. Another top weakness had to do with the company’s bestselling product, a special machine that customers drive their locomotives onto to re-profile the wheels—a process critical to maintaining safe, efficient train operations. The consumable tooling for this machine is analogous to razor blades in that it provides frequent, repeat sales revenue. Rather than control this supply chain, however, our company had long ago subcontracted the consumable tooling work to other suppliers.

Our top opportunities were essentially the flipside of these weaknesses. Like us, our customers were experiencing the ‘gray tsunami’ and were suffering from bottlenecks caused by a lack of talent to operate and maintain key equipment. The opportunity was to respond to our customers’ dilemma by offering more comprehensive maintenance services utilizing our own labor. As for the ‘razor blades’ for the re-profiling machine, bringing this work back in house would not only improve profitability but would also restore our company’s control over the design/manufacture process, thereby enabling us to provide a higher quality product more cost-effectively. But manufacturing these cutter bodies and blades required 5-axis computer-controlled machinery that would need to be purchased, programmed, operated, and maintained. We barely had enough machinists to handle the current workload, let alone venture into even more labor-intensive and complex products and services.

How to establish and maintain a continuous supply of talent? To find the answer, I looked to Simmons’ sister companies in Germany. There, a centuries-old system, sustained by uninterrupted government investment, provides education, vocational skills, and job opportunities for young people. German industrial firms of all sizes and in a variety of precision engineering/manufacturing industries—from automotive to medical devices, aerospace to manufacturing equipment—provide ‘dual track’ apprenticeship slots, whereby students take classes at the local Berufsschule (vocational school) while simultaneously working at the company. This starts in the equivalent of 10th grade and, depending on the program, runs for 3-4 years. Mature, dependable, and well-educated students graduate into a full-time position. This system, combined with a culture driven to produce high-value, high-quality goods, allowed Germany to create the workforce pipeline that we were lacking at our upstate New York facility.

Inspired by this model, we contacted Professor David Larkin at Hudson Valley Community College’s Advanced Manufacturing Technology program and told him about our need for qualified personnel to operate the state-of-the-art 5-axis CNC machinery. Together, we developed a corporate sponsorship program at HVCC that works like this: Each year, Simmons pays two students’ tuition on a sliding scale from 50 to 100 percent, depending on academic performance. We provide them with part-time employment during the semester, full-time employment in the summer between their first and second year, and, upon graduation, a full-time job with another two years of on-the-job training. Over the past decade, we have sponsored 20 students with tremendous success, creating a ‘virtuous circle’ where well-skilled employees are always pushing the envelope, making our products better and better.

HVCC is looking to double the size of its Advanced Manufacturing program, and the demand for similar partnerships is growing. New York State and the federal government should jump on this opportunity and do all they can to fund successful employer-education partnerships—not only in the Capital Region, but throughout New York and the entire nation. In America, we talk about how our people are our greatest asset, but great assets require investment and maintenance. Germany walks the talk. Investing in us, our human capital, is the only way we will grow this economy sustainably while ensuring a wider group of our citizens participate in its benefits. Warren Buffett, America’s most famous billionaire investor, once said, “Invest in as much of yourself as you can. You are your own biggest asset by far.” Seems like perfect advice for our policymakers.

David William Davis, today’s guest author, is the President and COO of Simmons Machine Tool Corporation. To learn more about David, and SMT, please visit their website: http://smtgroup.com/.